One day in late 2005, after losing yet another bruising political battle to the bean counters inside General Motors, then-vice chairman “Maximum” Bob Lutz heard of a startup called Tesla Motors intending to bring an all-electric sports car to market. Enraged that a bunch of Silicon Valley gearheads could do what he couldn’t, Lutz, in his own words, “just lost it.” He rallied his fellow car guys within GM to develop the prototype of what became the Chevrolet Volt—the “moon shot” justifying the company’s survival and the first in a new wave of electric vehicles just beginning to break on dealers’ showrooms. And while the Volt uses just a tiny bit of gas, it’s still powered by a material that is in short supply and controlled by some of the most hard to deal with governments in the world. Its lithium battery might just create a new geopolitical calculus that is just as problematic as the gas-based one electric cars are supposed to extricate us from.

In his new book, Car Guys vs. Bean Counters, a triumphant Lutz mockingly recalls Toyota’s reaction to the Volt’s unveiling in January 2007. “Toyota immediately labeled Volt a clever but meaningless PR exercise, using a battery chemistry, lithium-ion, which was dangerous, unreliable, and far from ready for automotive use. How much sounder, they trumpeted, was their own homely little Prius using (now eclipsed) nickel metal hydride batteries.”

Toyota was wrong. The lithium at the heart of the Volt’s battery is now the gold standard for new electric cars everywhere. But is there enough of the silvery soft metal to eventually power a billion automobiles, and can we mine it fast enough? Or are we trading one finite resource for another? And in doing so, will we also trade our allegiance from OPEC to OLEC—the “Organization of Lithium Exporting Countries?”

2. Peak Lithium?

A month before the Volt announcement, an energy analyst named William Tahil published a paper titled “The Trouble With Lithium.” There simply isn’t enough cheap lithium to go around, he argued, and 80% of the world’s accessible reserves are located in the so-called “Lithium Triangle” of the Chilean, Argentine, and Bolivian Andes (pictured above). “If the world was to exchange oil for Li-ion based battery propulsion,” Tahil wrote, “South America would become the new Middle East. Bolivia would become far more of a focus of world attention than Saudi Arabia ever was.” Even then, we would run out of lithium long before we’d finished electrifying our cars.

Tahil’s paper immediately came under fire for his overly pessimistic predictions. (And his general credibility.) Researchers at the Argonne National Laboratory outside Chicago—a hotbed of lithium battery innovation—estimate worldwide demand will eventually top out at 8 million metric tons, total. (The Volt’s massive battery array only requires about nine pounds.) That’s well within the U.S. Geological Survey’s conservative estimate of 12 million tons of recoverable reserves. As refining improves and new deposits are discovered, that figure will only go up. And unlike oil, lithium can be recycled; once you get it out of the ground, it’s yours.

That’s easier said than done. Worldwide lithium production was 120,000 tons in 2009, roughly a quarter of which was bound for batteries. But if electric cars achieve just a 5% penetration rate by 2020, according to the British research firm Roskill, the 60,000 tons required for batteries will outstrip the available supply. The bottleneck isn’t “peak lithium,” it’s how fast and how badly we want our electric cars.

3. From Petro-Dictators To Electro-Dictators?

Fortunately for GM and Toyota, Chile’s and Argentina’s lithium deposits are open for business. But the largest lies across the border in Bolivia, containing anywhere from 9 million (the official U.S. estimate) to a credulity-straining 100 million tons of lithium. Bolivia’s president Evo Morales (left) is no friend of the U.S., however; he pals around with Venezuela’s Hugo Chavez and Iranian president Mahmoud Ahmadinejad. He once expelled the U.S. ambassador and likes to end speeches with the rallying cry, “Death to the Yankees!”

But Bolivia has had no shortage of supplicants. Representatives from China, France, Sumitomo, Mitsubishi and LG Chem—which supplies the Volt’s battery—have all made entreaties. What would happen if Morales gave in and went with a Chinese consortium, or picked a fight with Chile? If the Carter Doctrine was necessary to secure Middle East oil, will there someday be an Obama Doctrine for South American lithium?

“Chile is the one we can rely on,” says Steve LeVine, a contributing editor to Foreign Policy and an energy security expert at Georgetown. “But I just got back from Kazakhstan, and they have a lot of lithium, and it’s cheap.” Then again, Kazakhstan is a virtual autocracy ruled for 20 years by the opposition-less President Nursultan Nazarbayev. Afghanistan may also be rich in lithium if reports of a trillion dollars in mineral wealth are accurate. But America’s relationship with president Hamid Karzai is complicated, to say the least.

After Bolivia and Chile, the nation with the largest reserves is China, which knows how to play hard ball with minerals—witness the recent fights over rare earth metal prices when China restricted their exports. While there is no OLEC looming on the horizon, the U.S. once again finds itself staking its way of life on a substance with very complicated geo-politics.

4. If It’s Not Lithium, It’s Something Else

There are two alternatives to entrusting the bulk of America’s lithium supply to Chile, Bolivia, or even Afghanistan—discover new sources closer to home, or innovate our way out. In Bottled Lightning, author Seth Fletcher pays a visit to Western Lithium’s stake in the Nevada foothills where it hopes to mine lithium from clay deposits. A spin-off from Lawrence Livermore National Laboratory called Simbol Mining believes it can meet nearly a fifth of the world’s needs by mining California’s (chemical-rich) Salton Sea.

The other option is to treat Li-ion batteries as a bridge technology on the way to something lighter, cheaper, and better. “We need something with the energy density of gasoline,” says LeVine. “We need the new technology—sulfur-air, zinc-air, lithium-air.” Other teams are working on a battery made of molten melts and salts.

One startup that had eschewed lithium for zinc-air is the Easton, Pennsylvania-based Eos Energy Storage, which is in talks to license its proprietary battery to the automakers. “Zinc is energy dense, safe, and stable,” says Eos CEO Michael Oster. “The U.S. is one of the top five producers in the world, along with Canada and Australia. So, in terms of energy independence, that’s one way to get there.”

Of course, there is always the possibility that lithium isn’t the real bottleneck at all. What keeps LeVine up at night is phosphorous, which is used in the Li-ion chemistry used by A123 Systems and Chinese battery makers. It is also vital to food production and is rapidly running out. (The U.S. doesn’t have much it, either.) And then there are the rare earth metals essential to an electric car’s permanent magnets, 97% of which are found in China. In perhaps a taste of what’s to come, Chinese officials have drastically cut exports since the beginning of the year, causing prices to soar as high as 475%. If this keeps up, oil prices may start to seem like a bargain.